A Guide to Working with Clients

ARTICLE INFORMATION

Article: A Guide to Working with Clients
Author: HAWRAF
Publication: The Creative Independent

📖 Read here: https://thecreativeindependent.com/guides/a-guide-to-working-with-clients/

HOOK

HAWRAF, an interactive design studio that has worked with everyone from Fortune 500 companies to fledgling startups, shares their hard-won wisdom on valuing your work and building successful client relationships.

ONE-SENTENCE TAKEAWAY

Understanding your true worth through careful financial calculation and value-based pricing, combined with strategic client screening, creates the foundation for successful creative client relationships.

SUMMARY

HAWRAF, an interactive design and technology studio, presents a comprehensive guide to working with clients based on their experience with both major corporations and startups. The guide emphasizes that their approach represents one way of working rather than the only way, encouraging readers to experiment and adapt practices to their own needs over time.

The article begins with a deep dive into understanding your value as a creative professional. HAWRAF walks readers through detailed financial calculations starting with determining what it costs to be you: calculating living expenses, taxes, insurance, and creating three income benchmarks: base (survival), target (comfortable), and goal (aspirational). They then extend this to calculating business costs including rent, insurance, software, marketing, and other operational expenses, combining these with personal income needs to establish revenue benchmarks.

The guide progresses to calculating hourly rates by determining annual billable hours after accounting for weekends, holidays, vacations, sick days, and non-billable administrative time. HAWRAF presents the formula for dividing annual revenue by billable hours to establish hourly rate ranges. However, they make a compelling case against hourly billing, advocating instead for value-based project pricing. They argue that hourly rates put you in the business of selling time rather than work, limit growth potential, and keep client conversations focused on hours rather than outcomes.

The value pricing section explores how to scale service costs based on client type, project impact, and personal interest in the work. HAWRAF emphasizes understanding the specific value you bring to each client, considering factors like the client's business size, the project's potential to increase their bottom line, and how the project might benefit your own portfolio or future opportunities. They stress the importance of knowing competitive costs and understanding the next-best alternatives to your services.

The final section covers screening potential clients, beginning with setting up initial calls or in-person meetings. HAWRAF advises coming prepared with research about the client's business, funding, revenue, and the decision-maker's role and expertise. They position the first conversation as a two-way street: an opportunity to sell your services while also gathering information to decide if you want the project and at what rate. The article provides specific questions to ask potential clients about challenges, concerns, expected outcomes, and their experience with similar services.

Throughout the guide, HAWRAF maintains a practical, no-nonsense tone while acknowledging that practices should evolve over time. They reference other resources and professionals who have influenced their approach, creating a comprehensive yet flexible framework for creative professionals working with clients.

INSIGHTS

Core Insights

Creative professionals must calculate both personal living costs and business expenses to establish true financial needs
Hourly rates should inform pricing but value-based project billing creates better client relationships and growth potential
Three-tier income benchmarks (base, target, goal) provide realistic financial planning for creative businesses
Client screening is as much about you choosing the right clients as clients choosing you
The first client conversation serves dual purposes: selling your services and evaluating if the project aligns with your needs
Value varies dramatically based on client context. A website for 1.86 billion users has vastly different value than one for a local ice cream shop
Not every client will agree with your value assessment, and misalignment often predicts poor working relationships

How This Connects to Broader Trends/Topics

Reflects the broader shift from service-based to value-based pricing in creative industries
Connects to the gig economy and freelance work by providing financial frameworks for independent creatives
Aligns with business coaching trends emphasizing financial literacy for creative professionals
Demonstrates the consulting industry's move toward partnership rather than vendor relationships with clients
Shows the evolution of creative businesses from selling time to selling outcomes and expertise
Illustrates the importance of boundaries and selectivity in sustainable creative careers

FRAMEWORKS & MODELS

The Three-Tier Financial Framework

Components: Base income (survival), Target income (comfortable), Goal income (aspirational)
How it works: Calculate personal living expenses and business costs, then establish three revenue benchmarks that account for both necessities and growth aspirations
Evidence: HAWRAF's experience working with diverse clients and maintaining a successful studio
Significance: Prevents underpricing by establishing minimum viable rates while providing clear targets for business growth
Application: Use base rate as your absolute minimum, target rate for standard pricing, and goal rate for premium opportunities

Value-Based Pricing Model

Components: Client type assessment, project impact evaluation, personal interest factor, competitive analysis
How it works: Price projects based on the value delivered to the client rather than hours worked, using your calculated hourly rate as a baseline but adjusting based on multiple value factors
Evidence: HAWRAF's preference for project rates over hourly billing, supported by references to other industry leaders like Teehan+Lax and Dan Mall
Significance: Shifts the conversation from time to outcomes, allows for scalability, and creates better client relationships focused on results
Application: Assess each potential client's business size, project impact, and strategic value to determine appropriate pricing tiers

Client Screening Framework

Components: Pre-call research, structured conversation, mutual evaluation criteria
How it works: Systematically gather information about potential clients before initial meetings, prepare specific questions to assess project fit, and treat the first conversation as a two-way evaluation
Evidence: HAWRAF's experience with successful client relationships and avoiding problematic projects
Significance: Prevents mismatches in expectations, values, and working styles that often lead to difficult client relationships
Application: Research client funding, revenue, and decision-makers; prepare questions about challenges, outcomes, and decision processes; evaluate both the project's fit and the client's compatibility

QUOTES

"Despite our (thus far, mostly) successful track record, we should note that while this is how we do things at HAWRAF, that doesn't mean this is the only way, let alone the best way, to do things. It's simply a way. You should experiment to see what works best for you. Similarly, what works for you today might not work for you a month, a year, or a decade from now, so keep experimenting."
- Appears in the introduction, setting the tone for the entire guide
- This quote establishes HAWRAF's humble, flexible approach and acknowledges that business practices should evolve over time
"Charging hourly rates means we're in the business of selling our time versus our work, and all client conversations eventually circle back to that. (Trust us.)"
- Appears in the section arguing against hourly rates
- This reveals a key insight about how billing methods shape client relationships and conversations, emphasizing the psychological impact of pricing structures
"You should charge clients based on the value of what you're offering. You add value through your education, experience, skills, process, and other things you bring to the table."
- Appears in the value pricing section
- This quote encapsulates the core philosophy of value-based pricing and reminds creatives to consider their full range of contributions beyond just time spent
"The first conversation is not only an opportunity for you to sell yourself and your services. It's also your opportunity to gather the information necessary to decide whether you want to do this project and at what rate."
- Appears in the client screening section
- This highlights the two-way nature of client relationships and empowers creatives to be selective about their work

APPLICATIONS

Financial Planning Applications

Calculate your personal living expenses including rent, insurance, groceries, taxes, and emergency funds
Establish three income tiers: base (survival), target (comfortable), and goal (aspirational)
Track all business expenses including rent, software, insurance, marketing, and professional fees
Determine annual billable hours by subtracting weekends, holidays, vacations, and administrative time from total available days
Use the formula: Annual Revenue ÷ Annual Billable Hours = Hourly Rate as a baseline for pricing

Pricing Strategy Applications

Move from hourly billing to value-based project pricing for better client relationships
Scale your pricing based on client type (individual, SMB, enterprise) and project impact
Consider your own interest in the project and future leverage opportunities when setting prices
Research competitive rates in your industry and region, using appropriate benchmarks
Understand the next-best alternative to your service and position your value accordingly

Client Screening Applications

Research potential clients thoroughly before initial meetings, including their funding, revenue, and recent projects
Set clear expectations for initial calls, including who contacts whom and through what channel
Prepare specific questions about project challenges, concerns, expected outcomes, and success metrics
Ask about previous experience with similar services and what they learned from those experiences
Inquire about other candidates they're considering and their decision-making criteria

Communication and Relationship Applications

Send calendar invites and confirmation emails for all meetings to demonstrate professionalism
Use initial conversations to set the tone for the entire client relationship
Frame discussions around value and outcomes rather than time and costs
Be prepared to walk away if value alignment cannot be achieved
Treat client relationships as partnerships rather than vendor arrangements

Business Growth Applications

Revisit your financial calculations annually to account for cost of living increases
Experiment with different pricing models and client types to find your optimal mix
Use each project as an opportunity to refine your processes and pricing strategies
Build a portfolio that demonstrates the value you bring to different types of clients
Develop templates and systems for client screening and onboarding to scale your practice

REFERENCES

Key Resources Mentioned

Lewis Weil's guide to financial planning for artists: Referenced for additional help with budgeting and financial goal setting
Teehan+Lax: Cited for their approach to eliminating hourly rates in favor of tiered value-based pricing
Dan Mall's book "Pricing Design": Recommended reading from the founder of design collaborative SuperFriendly
Femke's writing on value pricing: Specifically referenced for freelancers interested in value-based pricing models
Online rate calculators: Multiple tools referenced for cross-checking hourly rate calculations
Time-tracking tools: Several options mentioned for tracking service delivery times to improve estimating accuracy

Business and Financial Concepts

Cost of Goods Sold (COGS): Referenced in the revenue formula: Revenue - (COGS + Business Expenses) = Income
Billable vs. non-billable hours: Distinction made between time spent on client work versus administrative tasks
Value-based pricing: Core concept presented as alternative to hourly billing
Three-tier income structure: Base, target, and goal income levels for financial planning
Cost of living increases: Noted as 1.5-3% annually, requiring regular financial reassessment

Industry and Market References

Fortune 500 companies: Part of HAWRAF's client experience informing their approach
Fledgling startups: Other end of HAWRAF's client spectrum, demonstrating diverse experience
Squarespace: Referenced as a next-best alternative to custom website services
Facebook acquisition: Mentioned in context of Teehan+Lax's experience pre-acquisition
Cis white men: Noted as a benchmark for competitive pricing in some industries

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